=+c. Assume that optimal choices always occur on the two-dimensional slice you have identified. Illustrate how you

Question:

=+c. Assume that optimal choices always occur on the two-dimensional slice you have identified.

Illustrate how you could derive a demand curve for c1

, that is, a curve that shows the relationship between c1 on the horizontal axis and the interest rate r on the vertical. Does this curve slope up or down? What does your answer depend on?

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Ali Khawaja

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